Sunday, July 18, 2010

Azerbaijan Says BP to Stay in Shah Deniz Gas Field

BP Plc, which seeks to sell $10 billion in assets to pay for oil-spill damages in the U.S., will remain a partner in Azerbaijan’s largest natural-gas field at Shah Deniz, the country’s energy minister said.

“We are not looking at any means of changing BP as our main partner, or even finding other investors,” Natig Aliyev said in an interview in Batumi, Georgia, today. “The consortium is already formed, things are going well, and it is not discussed.”

BP, Europe’s second-biggest oil company, has halted dividend payments to shareholders and is selling assets to pay for damage from a blowout at its Macondo well that resulted in the worst oil spill in U.S. history. The company stopped the flow of oil on July 15, three months after an explosion caused 35,000 to 60,000 barrels of crude to spew daily into the Gulf of Mexico.

BP has already sold $289 million in assets, including U.S. oil storage tanks and pipelines, to Magellan Midstream Partners LP. Abu Dhabi, home to one of the world’s largest sovereign wealth funds, may consider investing in the company, Crown Prince Sheikh Mohammed bin Zayed Al Nahyan said last week.

BP is the operator of Shah Deniz, which supplies the South Caucasus Pipeline through Turkey. Its partners in the Caspian Sea field include Statoil ASA and OAO Lukoil.

OAO Gazprom, the world’s biggest producer of natural gas, would consider buying a stake in Shah Deniz if offered, the Moscow-based company’s Chief Executive Officer Alexei Miller said last month. Gas from the second phase of the field’s development would help feed the planned Nabucco pipeline, which would extend from Turkey to Europe and avoid Russian territory.

Gazprom may buy more gas from Shah Deniz, though there are no plans to sell stakes in the Azerbaijani field, Aliyev said.

“BP will stay,” the minister said. “I wouldn’t want BP to leave this project.”

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